Srijan Technologies, an Indian IT company established in 1999, has successfully leveraged open source business models to achieve significant growth, transitioning from small outsourcing projects to larger custom development and consulting services. The company aims to expand its offerings and improve profit margins while addressing challenges like talent acquisition and competition in the outsourcing market. With a commitment to innovation and team development, Srijan plans to diversify and adopt new business strategies, including a SaaS model for its hosting solutions.

1. For U & Me | Case Study _________________________________________________________________________________________
Open Source
the New Mantra for
Business Innovation
Delhi-based Srijan Technologies has been successfully innovating and
experimenting with business models to emerge as a true icon in the open
source arena.
“I
can get better,” is what Messi’s story is about the victory of skill
Barcelona superstar Lionel and will over hardship. The story of Delhi-
Messi had to say after based Srijan Technologies, an IT company
his masterful four-goal working on Drupal, TYPO3, and Django, runs
performance against Arsenal in the Champions along similar lines. After a pitched battle against
League 2010 quarter-final. Born with a growth mindsets, a talent crunch and strong proprietary
disorder, no team was prepared to back the rare competitors, Srijan has emerged triumphant
condition that plagued Messi. But his fate soon with a successful open source business model.
led him to Barcelona and there has been no Growing at roughly 15 per cent today, Srijan
looking back since. has achieved revenues of nearly Rs 2 crores.
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2. _________________________________________________________________________________________________ Case Study | For U & Me
And like Messi, the firm plans to Switzerland, Thailand, Singapore, USA
improve by raising growth targets to and India. Some early customers include
30-40 per cent and profit margins to IDRC, BAHAG AG (Germany), TU
20-22 per cent. Alongside, the company Delft (Delft University of Technology,
has evolved beyond the outsourcing The Netherlands), etc.
model, with as much as 40 per cent of But what was the business model
its business coming from India. around outsourcing? Srijan made
“There is a huge misconception money by grabbing parts of projects—
that open source is not profitable. We at primarily in module development—
Srijan have shattered that myth. Open from customers in Germany and the
source offers world-class technology Netherlands.
products that are free and allow the Customers, mostly development
vendor to custom build modules to map shops, outsourced their work to Srijan,
customers’ business processes. This gives in order to be able to focus on their core
even small companies (and individuals) competency, gain time-to-market by
such as Srijan, from the developing buying rather than building wherever
world, an ‘equal opportunity’ to stand tall possible, reduce cost, and increase
with their western counterparts and offer operational efficiency. “We began
world-class solutions. with providing outsourcing solutions
“To customers, this means access on custom Web-based PHP and ASP
to world-class technology at affordable applications during the start of our
rates. What you build over, gives business. Later, we worked on websites,
you a distinct advantage that makes enterprise-applications and Web
you relevant for corporation or other applications using frameworks based on
commercial enterprises, giving immense PHP, Python, and Ruby,” says Bhat.
scope to create a profitable business But the path wasn’t easy. Like
model. Our ability to design solutions any other struggling start-up,
on open source platforms to resolve getting the first deal was far from a
complex communication problems of our cakewalk. References from within the
clients, gave us this edge. And the result industry, word of mouth publicity and
is escalating RoI on our open source participation in global events got the
offerings,” says Vikram Bhat, head, sales firm its initial recognition. The team
and marketing, Srijan Technologies. saw tough times like shoestring budget
travel (including staying in Youth
First tryst with open source Hostel dormitories) to Europe to win the
Srijan was started in 1999 as a first international clients.
partnership venture, and was then turned “When we began, the strategy
into a proprietorship. In 2001-2002, was not to sell open source solutions.
founder Rahul Dewan, a first generation Around December 2003, through
entrepreneur, decided to focus on sponsorship from the World Bank (due
ideas around ‘doing things better’ in to our association with an incubation
the technology realm. This led to the company) we got a chance to have
discovery of open source in 2002-03. a small stall at the ICT4D event in
“The initial solutions we sold Geneva, Switzerland. Representatives
were small outsourcing projects from IDRC, New Delhi, were looking
based on open source platforms. We for vendors based in New Delhi to
began working on TYPO3 projects work on their website using Postnuke,
and then moved on to other platforms an open source CMS. They wanted to
like Drupal, Ruby on Rails, Magento shift from their current Canada-based
and Django to solve mission critical vendors to a New Delhi vendor for
business problems,” says Bhat. better management. We replicated
The firm has, to date, worked their whole site in Postnuke free of
on such outsourcing projects for cost to prove that open source content
end customers in Australia, Austria, management systems was something
Belgium, Canada, Denmark, France, we could handle, and we got the
Germany, Netherlands, Spain, Sweden, project. That was our first tryst with
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3. For U & Me | Case Study _________________________________________________________________________________________________
open source, and the world of content management systems problems, it still faces macro environment challenges. “Talent
(CMS),” narrates Dewan, describing the chance events that is a huge challenge today. Skilled talent is available, but at a
led to Srijan’s adoption of open source software. very high cost, making it unaffordable for a growing company
“Thrilled with this open world, in April 2004, while like ours. To solve this, we are venturing into Tier 2 and 3 cities
researching on other open source CMSs, we found www. to acquire talent at lower rates and internally train people. Our
typo3.org, and were amazed by its feature list, which was plan to start a satellite office in Srinagar is in alignment with this
free and out-of-the-box. We put a developer to the task goal. We hope to create Srijan hubs at a number of small cities to
of researching TYPO3, and started to talk about it on our grow and also overcome the talent challenge,” says Bhat.
website. Within 30 days, a huge corporation in Germany Very early on, Srijan recognised that ‘people’ make the
found us, and awarded us our first PHP project. Then came a difference in a service-based business model. Thus, the success
flurry of TYPO3 projects, and those were the defining days for of the company had to be shared and has been instrumental to
Srijan. We started growing, on the foundation of open source its business growth and achievements. “At Srijan, we maintain
software, and reinvented ourselves.” financial transparency with all our employees. The health of
Alongside, there were many ups and downs for Srijan. the company, the value of contracts, salaries of employees
Building a name in the competitive outsourcing market was (including the CEO) is open for everyone to access. It is
difficult. “To be honest, we messed up many projects. Slowly we actively shared during Saturday ‘knowledge sharing sessions’.
gained competence in what we were doing. Matching European This has helped Srijan’s business as we have been able to attract
quality standards was very difficult. We continued to learn and and retain highly driven and entrepreneurial people—who are
burn our fingers. But soon we had a good enough portfolio of critical for a start-up like ours,” says Bhat.
many ‘well done’ projects and ‘happy customers’, willing to give
us repeat business and even further references,” says Bhat. Plans for the future
Perseverance and hard work is what made this young Srijan hopes to diversify further and look at mergers to keep
firm’s business model a winner. its business flying high. “We shall diversify in the future. We
are already making a significant ESOP offering. We are also
Support seller working on a hosting solution of integrated service offerings
But with time, technology began to outpace the team, to our growing Indian customer base. We are at an advanced
resulting in the need for a fresh look at its business model. stage of developing this and hope to launch the solution
“An outsourcing model alone wasn’t enough. We needed three months down the line. Alongside, we are looking for
to grow and provide more than just handling backend companies (of our size or smaller) to merge with us to bring
activities,” confesses Bhat. Thus, Srijan adopted a ‘support more economies of scale and share good people, resulting in
seller’ model wherein it derived revenue from consulting, mutual growth for everyone involved,” says Bhat.
custom development, and post-sales support instead of The firm also hopes to evolve new business strategies,
traditional software licensing fees. like a combination of the rental model (pay as per use/SaaS)
“We provide a lot of value addition around content and dual licensing models. “For our hosting solution, we plan
management systems like Drupal, Django and TYPO3. Srijan an indirect revenue model, where the core product is free-of-
recognised early the need to offer integrated business analysis, cost but an enterprise version with support and adds-ons is
information architecture and UI design services under one available on a pay-by-service model -- also called a SaaS/
roof for strategising, conceptualising, and designing large rental model,” says Bhat.
applications and portals. We thus partnered with Itu Chaudhuri By constantly working on its business strategies, Srijan
Design and Dolka Innovations— both broad-based design Technologies will continue to chart an independent course in
agencies. This led Srijan to winning the contract for large the open source world.
magazine portals such as openthemagazine.com, which is
built on Drupal,” says Bhat. The client list currently includes
bigwigs like Centre for Science and Environment, The World By: Vanisha Joseph
Bank, Bharti, Open Media Network, etc. The author loves to experiment and writing for LINUX For You
is her latest experiment. So, beware! Just a minute, she also
Yet, business challenges remain. Though the firm has happens to be a journalist during the day.
overcome the initial mindset issue and a number of teething
26 | JUNE 2010 | LINUX For YoU | www.LinuxForU.com